Authors:
Presents long-run data for 35 OECD countries to formulate analysis
Works with observable variables only
Makes a fundamental change of paradigm from flow to stock
Allows for the Phillips Curve to be time-dependent
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Table of contents (5 chapters)
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Front Matter
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Back Matter
About this book
This book explains why inflation remains subdued after recessions, based on three revolutionary concepts: defensive expectations, compensatory savings, and cumulative wage gap. When income falls, consumption falls, and savings rise, as people rebuild their past wealth. Households will not spend more until they fully recover what they lost. The revised Phillips Curve explains that current inflation depends on the cumulative difference between current income and past income.
This new theory is tested and validated by data for US since 1960 to date and for 35 OECD countries from 1990 to date. A number of policy implications are derived from these results. The book calls for an optimal policy mix between monetary policy and fiscal policy; it also discusses the coronavirus crisis as an extreme case of defensive expectations.
Authors and Affiliations
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OEDNE, International Monetary Fund, Washington, DC, USA
Liviu Voinea
About the author
Bibliographic Information
Book Title: Defensive Expectations
Book Subtitle: Reinventing the Phillips Curve as a Policy Mix
Authors: Liviu Voinea
DOI: https://doi.org/10.1007/978-3-030-55045-5
Publisher: Palgrave Macmillan Cham
eBook Packages: Economics and Finance, Economics and Finance (R0)
Copyright Information: The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021
Hardcover ISBN: 978-3-030-55044-8Published: 10 December 2020
Softcover ISBN: 978-3-030-55047-9Published: 11 December 2021
eBook ISBN: 978-3-030-55045-5Published: 09 December 2020
Edition Number: 1
Number of Pages: XXVII, 196
Number of Illustrations: 21 b/w illustrations
Topics: Macroeconomics/Monetary Economics//Financial Economics, Economic Policy, Microeconomics, Political Economy/Economic Systems, International Political Economy